Greater Philadelphia remains one of the East Coast’s most resilient industrial markets, maintaining a quarterly vacancy rate of 6.7 percent. The area continues to offer exceptional value for occupiers compared to the high-rent environment of the New York City and Northern New Jersey metros. This quarter, leases were signed across diverse industries, benefiting from the area’s distribution networks across the northeast’s ample ports and highways. Demand is also being buoyed by manufacturing requirements driven by the commercialization of new technologies, network optimizations, and foreign direct investment.
While Philadelphia’s yearly industrial rent growth has receded to 6.8 percent from its high of 12.6 percent in mid-2022, it still outperforms the national average of 5.3 percent. Construction starts have declined due to higher interest rates, available inventory, and the impending arrival of 13.9 million square feet of new space by mid-2024.
Due to the recent collapse of the Francis Scott Key Bridge in Baltimore, Maryland, from a container vessel collision, container traffic is being diverted to other Ports along the East Coast, including NY/NJ, PhilaPort, and Wilmington all of which will have a short-term impact on demand for warehouse space, 3PL capacity levels, and demand for outside storage (due to Baltimore’s large automotive import volumes).
Download the full report to learn more.